Saudi Arabia’s Public Investment Fund is in talks with Aston Martin about taking a stake in the company as the luxury car maker aims to raise additional money for its next batch of cars, four people said.
The PIF, which already has stakes in Lucid Motors and McLaren, is in talks to take new shares in the company that could be worth £200m, the people said. Talks are at an early stage, she added.
Aston faces the challenge of financing its next generation of sports cars, and its first push toward electric vehicles, at a time when the company is saddled with debt and not producing net cash.
The company doesn’t expect to start generating cash until 2023, and one of Aston’s first priorities is to start paying off some of its high-yield debt.
The group has £957 million in net debt at the end of March and expects to pay around £130 million in interest this year.
Lower car sales due to the company’s reliance on wholesale model sales to dealers, as well as a much slower-than-expected rollout of its Valkyrie hypercar, have all prompted Aston to seek other sources of funding for its upcoming generation of vehicles. that are critical to the survival of the business.
The discussions represent a reversal from the company’s publicly stated stance in February, when chairman and owner Lawrence Stroll insisted the company needed no additional funding.
“Let me be crystal clear, in black and white: we don’t need money,” he said at the time.
Aston’s latest fundraising talks were first reported by Autocar magazine. Aston shares fell 18 percent on Thursday, after Autocar’s report.
Aston Martin declined to comment. The PIF did not respond to a request for comment.
Aston already has a relationship with the kingdom, following a deal with Aramco to rename the F1 team.
Stroll, who invested in the company in January 2020, has sought to turn the business around, clearing showrooms with surplus cars and realigning offerings to real customer demand to reinvigorate the brand’s luxuries. build.
Last month, Stroll revealed that Aston rejected an approach from Audi that its Formula 1 team would enter the sport from 2026. Stroll, whose son Lance races on the team, told analysts last month that he was “very happy with our Mercedes relationship”.
Mercedes team principal Toto Wolff told the Financial Times last month that the brand could scrap one of its three F1 engine customers, including Aston, due to new rules.
Two people said Audi was still in talks with Aston, but not about an equity stake.
Any investment by an existing carmaker would be complicated by Aston’s relationship with Mercedes-Benz, which owns one-fifth of the carmaker’s shares, and by a technology agreement to supply Aston with engines and other systems.
Last month, Aston appointed former Ferrari boss Amedeo Felisa as its new chief executive, replacing ex-Mercedes director Tobias Moers. The replacement will become Felisa Aston’s third CEO within two years.
Additional reporting by Joe Miller in Frankfurt